Mr. Barkatullah Lone is Chairman of Gilgit-Baltistan International Economic Forum and is associated with a FMCG Group as CFO in a GCC county. He is a Chartered Management Accountant and Chartered Certified Accountant from UK, Chartered Global Management Accountant from the USA, Gold Medalist Management Accountant and Public Finance Accountant from Pakistan plus he holds Masters Degree in Economics and LLB from Karachi University. He has been associated with the corporate sector in Finance and Audit profession at various positions. His articles on Economy and Finance are also published in various reputed magazines.

PAGE: YOUR VIEWS ON SAVINGS CULTURE IN PAKISTAN:

BARKATULLAH LONE: Savings and investment are two key macro variables with micro foundations, which can play a significant role in economic growth, inflation stability and promotion of employment especially if seen in the context of a developing country. For self-reliance and growth objectives, mobilization of domestic resources and their efficient utilization are the two major policy-oriented focuses today. National savings are critically important to help maintain a higher level of investment which is a key determinant for economic uplift. Thereby, necessitating the analysis of saving investment behavior and its determinants for policy implications; this is a demanding area because of continuing debate on the potential role of their determinants. Now when we see in Pakistan, the savings and investment are the stimulus, which is lacking in our country for its desired economic growth. In 1960’s Pakistan was much ahead of Korea and Singapore with respect to saving and investment ratio, but these countries witnessed a good deal of increase in domestic savings level. Where Korea went up to 36.5% of GDP for Domestic Savings in 1990 and Singapore had almost half value of GDP as Domestic Savings in 1995. Japan, Hong Kong and China witnessed most stable rates of GDS. Japan has more than four times the domestic saving rate as compared to Pakistan in 1970, and then in the year 2016 it was still almost twice of the Pakistan’s rate. The closest was Indonesia with a rate of 14% of GDP as Domestic Savings in 1970 as compared to 9.0% of Pakistan’s, but the differential grew to 25% and 14% in 2000. After 1965, no country had a single digit GDS, but Pakistan witnessed it in 1970’s and 80’s. Even Thailand went from 14.1% to 35.4% in 1995 whereas Malaysia showed a continuous increase from 25.9% in 1960 to 47.2% in 2016. These figures could be taken as an indication as to how these economically developed countries been formed by a sustained high growth rates of Savings Investment and how they achieved the high economic growth rates. These countries have high saving and investment on sustained basis which is a pre-request for sustainable economic growth. Pakistan despite its pronounced efforts could not gear up to achieve the targets of high saving and investment and resultantly could not thrive economically as much.

PAGE: WHAT ARE YOUR VIEWS ON THE SAVINGS BY THE HOUSEWIVES AND CHILDREN?

BARKATULLAH LONE: Yes, these two categories of savings are, though, not much material but we have this trend in Pakistan. Housewives in Pakistan are mainly prudent and they save through different modes like BC culture (Ballot Committees). In our Pakistan society, we experience that many women keep on saving through BC or other ways and then support their husbands for investing in any business or buying a house. Similarly our children save so cutely from their pocket money and then give a surprise to their friends and parents by buying something of high value. I think it is a good practice as the same children when they grow up get accustomed to the culture of saving.

PAGE: YOUR VIEWS ON THE BENEFITS OF SAVINGS CULTURE FOR THE ECONOMY OF PAKISTAN:

BARKATULLAH LONE: There is never going to be enough money to save. That is what you must first accept if you want to develop the habit of saving. A salary increase for most people will not necessarily get them to save more. Your children finishing school will not get you to save more. A bigger client for your business will not get you to save more. Getting older will not enable you to save more. Paying off your mortgage and other debts will not get you to save more. All these are excuses not to start saving today. If you are not saving with what you have today, chances are you will not save when you have more money. Simply because you do not have a culture of saving. One of the definitions I found describes culture, as a way of thinking, behaving or working that exists in a society or organization. In my own words – something done consistently becomes a habit; a habit done over and over becomes a way of life i.e. a culture. If we look at our society, we have a spending culture as opposed to a savings culture. This is why most often a bigger salary means more spending even though we often delude ourselves into thinking we will invest or save more when a higher income comes along. Trust me; the world is never going to run out of things you can buy. You may think you have the latest phone, and a month later another model or upgraded version of your phone will be there. In view of all what I stated, a culture of savings in Pakistan will increase investment, which will not only result in the growth in economy rather it will generate employment opportunities and the multiplier effect (that we use the term in macro economy) will creep into Pakistan economy.

PAGE: HOW COULD YOUTH BE CONVINCED FOR THE BENEFITS OF SAVING?

BARKATULLAH LONE: Our youth need to be motivated for the benefits of savings through academia and then through electronic media. Our entire media wastes the time of the millions of our youth just showing the rubbish political debates. Our media should allocate sufficient time for economy programs, which will give in-depth understanding to our youth as to what the benefits of savings and investment are. Our 95% of youth believes in doing job and are never prone to do business then when the mentality of youth is business oriented, savings culture would never emerge. Academia and electronic media need to play a vital role in this connection.

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